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2008/SOM1/010anx4

Agenda Item: V

Questions – IAP Peer Review Canada

Purpose: Consideration

Submitted by: APEC Secretariat

/ First Senior Officials’ MeetingLima, Peru
2-3 March 2008

QUESTIONS– IAP PEER REVIEW CANADA

AUSTRALIA

  1. On page 16, there is a reference to Gender Empowerment Measures and, second, in referring to Canadian APEC priorities on page 26 of the report, it mentions “efforts to make the Asia-Pacific region more accessible to Canadian businesses, including women-owned enterprises”.

We would be interested to know if there are specific measures that have been used in Canada regarding women-owned enterprises and whether there has been any measurement of their success.

  1. (Annex 1 P22). We are interested in Canada’s response to Q33 of the Services Annex as it is not apparent that they have provided one.

Q33 reads “What measures has Canada taken to facilitate the international mobility of foreign students, including mutual recognition of academic diplomas and degrees? What are the legal regulations and requirements for foreign entities to set up foreign language teaching institutions or examination centres in Canada? What facilitation measures can be provided by Canada? What are the restrictions and requirements on education services conducted by foreign providers (e.g. legal entities and foreign language teachers) in Canada?”

  1. The report notes under 1.3 that while Canada is pursuing an ambitious bilateral agenda the reciprocal concessions have resulted in negligible trade barrier reductions since 2000. Acknowledging Canada’s high trade dependency on the US and the significant domestic policy and jurisdictional barriers that are likely to constrain Canada from unilaterally achieving free and open trade in services by 2010, does Canada view its increasing use of bilateral/regional (trade and investment) arrangements for services liberalisation as likely to provide gains of the same magnitude as under the multilateral system? How would Canada seek to improve the outcomes from its bilateral agreements on this issue?
  1. On P.37, Australia notes that the IAP report indicates that “the current supply management system emerged from a situation in the 1960s of chronically depressed prices and highly distorted international markets.” Given buoyant world prices for dairy products and the possibility of a WTO Doha Round outcome which would eliminate export subsidies and significantly cut domestic support, is Canada considering a reform agenda for its supply managed agricultural sectors?
  1. On P.46 it states that engineering services will benefit under NAFTA. Australia does not actually believe that this will be the case. There is an existing MRA which was negotiated between Canada, Mexico and the State Engineering Licensing Boards in the US under NAFTA. Texas is the only State to have signed onto this agreement and no other State has signalled an intention of doing so.
  1. With regards to professional services (i.e. accounting, architecture, engineering and legal), Canada maintains a number of citizenship and residency requirements for accreditation at the sub-federal level in its GATS schedule of commitments. As noted in the APEC IAP study report, this is due to domestic policy and juridical barriers. Is Canada able to outline in which services sectors it will be able to achieve further liberalisation in the Doha round?
  1. Canada is the only developed economy that retains a requirement for majority local ownership for all telecommunications companies operating in its territory. Could Canada please provide an update on the review of this requirement by its Competition Policy Review Panel?
  1. While Canada is a strong supporter of the need to reform world agricultural trade there has been a number of recent policy developments in Canada that appear to contradict this objective. Specifically, Australia notes:
  • In February 2007 Canada announced it would be initiating negotiations under Article XXVIII of the General Agreement on Tariffs and Trade to restrict imports of milk protein concentrates. Australia is concerned that Canada’s action may encourage other WTO members to adopt similar protectionist measures for dairy and other products, further distorting world trade and restricting market access.
  • In June 2007 Canada proposed new compositional cheese standards. The changes are aimed at clarifying domestic regulations but also mandate an increased use of raw milk in cheeses. The changes support the domestic dairy industry and reduce demand for imported milk derivatives such as milk protein concentrates. The changes are more prescriptive than relevant Codex Alimentarius standards.
  • In 2007 AgriStability was established to replace aspects of the Canadian Agricultural Income Stabilization program. AgriStability provides payments to producers when their margin (profit) is below 85% of a reference margin. Such payments would not appear to help producers to become more self reliant and efficient but would instead make them more dependant on government payments.
  • In December 2007 the Canadian House of Commons Standing Committee on Agriculture and Agri-food reported on the Beef and Pork Sector Income Crisis. The report recommended cash advances and payouts to farmers which would be additional to existing support arrangements.

Australia is concerned that the direction of these policy developments and recommendations appears to run counter to Canada’s objective to promote the reform of world agriculture trade policies..

  • Does Canada intend to amend its producer support policies (such as AgriStability) so that they are more consistent with a trade reform agenda?
  • What is Canada’s reasoning for using WTO instruments and domestic legislative approaches to limit the use of milk derivatives (such as milk protein concentrates) in the dairy industry?
  • In what ways does Canada intend to compensate domestic processors for the likely increase in production costs as a result of this change?
  1. Australiais concerned that a Canadian parliamentary committee has recommended that cash payments be provided to support beef and pork producers. Are these recommendations supported by the Canadian Government and has Canada considered the use of non trade distorting measures as an alternative way to provide support, if needed?
  1. One minor comment is: in the study report, ($US) and (Can$) are used to differentiate between US and Canadian dollar terms, but there are parts where $ signs alone (without any denote) are used possibly causing some confusion.

HONG KONG, CHINA

3.7 Intellectual Property Rights (IPR) (page 64 of the report)

We note under “2008 – 2010: Canada’s Planned Improvements” that the planned improvements in Canada’s 2007 Individual Action Plan consist of, among others, technical cooperation including IP conferences and training for IP officials. We would like to know if Canada’s training is also open to interested administrations responsible for IPR enforcement in their respective economy.

JAPAN

(Trade Facilitation)

  1. Among three members (Canada, USA and Mexico), the SPP (Security and Prosperity Partnership) functions as an initiative to reduce costs and burdens on exporters, importers and travellers. Please describe how costs and burdens on travellers have been reduced?
  1. With regard to cargoes towards the US, how will they be affected by 100% cargo inspections by the US?

(The questions above, which we submitted before, have not been answered by Canada yet.)

(Mobility of Business People)

Japan appreciates Canada’s recent decision to recognise the ABTC Scheme in part. What is the schedule toward the full implementation of the Scheme?

KOREA

1.Korea understands that the Competition Policy Review Panel is currently reviewing the Investment Canada Act including foreign investment requirements in telecommunications services as indicated in the Study Report. Korea would appreciate it if Canada provides the details on the review conducted so far. We hope that there will be improvement in market access in this area.

2.In the dairy industry, the Federal Government of Canada has maintained a price supporting mechanism for butter and skim milk powder, which provides import protection through tariff rate quotas. We would like to know the Canadian government’s plan to improve this mechanism, including abolishment of trade-distorting policy.

MEXICO

1. Are there any reform exercises planned in order to avoid trade distortions generated by indirect limitations from the provincial and territorial governments with regard to the implementation of international trade agreements?

2. Since Canada´s economy is highly related to trade with the US, who recently faces financial constraints, are there measures planned to minimize some of the negative effects, and to what degree hose measures foresee particular actions with Asia-Pacific?

NEW ZEALAND

Comment: We commend Canada on the findings of the IAP Study Report, noting in particular the reviewers’ first conclusion that the Canadian economy is one of the most open and liberal economies among APEC and WTO members. We note further Canada’s constructive contribution and ‘continued active participation in a wide range of multilateral, regional and bilateral activities and negotiations in support of the Bogor goals’.

In the area of trade liberalisation we are particularly pleased to note Canada’s new “Blue Sky” Policy and see the ongoing liberalisation of the aviation section as a positive development. New Zealand and Canadian officials last year concluded negotiations on a new air transport agreement. We watch with interest further developments in the evolution of Canadian civil aviation policy.

We note the report’s observations on relative restrictions and discrimination against non-US trade partners. Canada has been pursuing an active bilateral and regional strategy and we acknowledge that Canada is currently in negotiations on a number of FTAs with partner countries. We congratulate Canada and Peru on the successful conclusion of FTA negotiations – announced just recently in Davos. We would like to take this opportunity to encourage continued and even greater engagement on trade liberalisation in the Asia-Pacific region.

With such a positive report card on progress towards liberalisation and the Bogor Goals, however, it is disappointing that Canada's entrenched protectionism in its agriculture sectors stands out as an anomaly to an otherwise open economy. Agricultural trade is among the world's most distorted sectors and freeing up that trade would be of immense benefit to a number of developed and developing countries within APEC.

Written Questions:

1It is somewhat perturbing to note that Canada has taken retrograde steps away from the Bogor Goals in the area of tariff elimination. Canada’s use of GATT Article XXVIII in 2006 to introduce new tariffs on certain dairy products represented a move to offer further protection to Canadian dairy farmers. How does Canada explain this development in view of its commitment to liberalising trade under the Bogor Declaration? What are Canada’s plans for unilateral liberalisation of its agriculture sector?

2In the area of non-tariff barriers to trade, the report refers to the APEC food system goal on the progressive elimination of unnecessary impediments to trade in food products, such as identification and phasing out of WTO inconsistent non-tariff measures. Can Canada explain the apparent contradictions in this approach in light of its own newly introduced technical regulations for cheese compositional standards (released by the CFIA on 26 December 2007)?

3Noting that Canada has made no GATS commitments in the area of Education Services, can Canada tell us if it intends on doing so in the future? If this is not the case, what are the reasons for not doing so?

4The IAP Study Report finds that internal barriers to trade within Canada play a part in Canada’s ability to reduce international trade barriers. We note the Canadian government made a commitment to reducing barriers to internal trade and we are interested to hear what concrete steps the Canadian government is currently taking to do so.

5In reference to section 3.1 of the study report(which notesthat Canada retains high tariff rates in sensitive sectors) could Canada provide detail regarding its plans to reduce and eliminate these tariffs consistent with the Bogor Goals. In particular it would be appreciated if Canada would provide detailsof its intentions in respect ofthe phasing out of its out-of-quota tariffs for agri-food products.

6Could you please provide additional background regarding the formation and operation of the Competition Panel? For instance, in what circumstance was it formed? What is the composition of the panel (industry, government representatives, secretariat?) Who does the Panel report to? How does the Panel interact with other policy making and enforcement agencies and business groups?

7Besides the APEC MRA on Conformity Assessment of Telecommunications Equipment and the MRA with Australia on Conformity Assessment in relation to Medicines - Good Manufacturing Practice Inspection and Certification as mentioned in the IAP Study Report, has Canada entered into any other MRAs or does it have plans to do so in the near future?

8With regard to MRAs/MLAs in the voluntary sector, to what extent do Canadian regulators recognise these MLAs as a means of supporting their regulatory frameworks? Please provide examples where Canadian regulators accept conformity assessment results under voluntary sector MLAs.

Noting that Canada assesses that it has fully met the goals in the government procurement area and seeks continuously to make improvements in the manner procurement activities are carried out, what initiatives has Canada undertaken or planned in the area of government procurement policies or practices to support sustainable development?

PHILIPPINES

The IP Philippines submits its comments and questions pertaining to the IP portion of

the APEC Individual Action Plan Study Report of Canada for the 2008 IAP Peer Review Session on 01 March 2008 inLima, Peru, as detailed herein below.

1. IP Philippines understands that Bill C-60' sought to implement amendments to the

Canadian Copyright Act and primarily intended to meet compliance obligations of twotreaties, i.e., the WIPO Copyright Treaty (TVCT) and' the WIPO Performance andPhonograms Treaty (TrllPPT). Since the bill has not been re-introduced after the federalelection in 2005, what is the action or planned course of action which the Canadiangovernment, particularly the Canadian Intellectual Property Office (CIPO), intends toundertake to ensure that obligations under the said treaties are met?

2. Canada has not entered into force its accession to the WCT and the WPPT. As per theWIPO, the latest status is that Canada signed the said treaties on 22 December 1997 butthese have not yet entered into force. It is proper for the Phdippines to bring this upconsidering that the said treaties have been in force in our country since

04 October 2002.

3. The report stated that the next two Bogor objectives that may need further

improvements for' their achevement by 2010 are transparency and information in

relation to intellectual property, among other issue areas. What are the moves and

initiatives that are or wdl be carried out to accomplish these objectives and how will suchimpact or affect other APEC economies?

4. Geographical indications for non-wine and non-spirit products are generally protected bycertification marks in Canada. With the ongoing negotiations on the European Union'sproposed extension of the protection of geographical inhcations to products other thanwines and spirits, is Canada considering an extension now? What is its stand on theproposal?

5. There is an outstanding proposal for the inclusion of Article 29bis of the TRIPS

Agreement which provides for requirements on the disclosure of source or origin of

biological resources that are involved in patent applications. Does Canada fully supportthis proposal? Can it provide information on the current situation and on how it wouldproceed with the implementation of the amendment, when approved?

6. The report identified areas for improvement of Canada's IP system and one of these

areas include "broad patentable subject matter for Canadian innovations." There is a

need to define these parameters clearly to avoid ever-greening of patents or the possiblepatenting of what may otherwise be non-patentable subject matters such as computerprograms. Canada should not follow the US patent system which makes patents availablefor "everythmg under the sun" such as computer programs. IP Phhppines stronglysuggests that Canada should maintain its current regime of keeping software protectionunder copyright.3

7. The report showed that the improvements relating to legislation, enforcement, CIPO activities and technical cooperation appear to have contributed to adequate and effectiveIPR protection and enforcement. In undertakmg these improvements, did the Canadiangovernment, particularly the CIPO, undergo organizational changes or restructuring?

8. As stated in the report, the 2002 peer review noted that Canada's comprehensive system of IPR protection is based on the premise that IPRs are best enforced by individual right holders. On this note, the US raised enforcement concerns relating to low prosecution rates arising from seizures of counterfeit goods at the border. For the Phhppines, we would like to see a more active involvement of the Canadian IP authorities in safeguarding the rights of Filipino researches and inventions as well as Phihppinebiodiversity and genetic resources that may be part or subject of a patent application inCanada. Thls also applies to Phdippine IPRs involving traditional knowledge and folklore. Fllipino right holders may be ill-equipped, both logistically and legally, to enforce their IPRs in Canada. Accordingly, IP Philippines recommends that the Canadian IPR system should be more proactive in the protection of such rights.

The IP Philippines anticipates Canada's responses to the aforementioned with a view thatknowledge on the same would be beneficial and could serve as supplementary guidance to thecollective and individual actions of the APEC economies.

1 Hill C-60, the Canadian equivalent to the Digital Millennium Copyright Act (DMCA), was originally tabled on 24 March 2005,rcceived and passed its First Reading in the Canadian House of Commons on 20 June 2005, with the Second Reading scheduledfor the fall of 2005. On 29 November 2005, the opposition to the government tabled a non-confidence motion which passed,dissolving Parliament and effectively killed the bill. The newly-elected government in 2006 has yet to table a similar bill.

3 See page 40, Annex 1 of the Initial Questionnaire and Canada's Responses for AI'EC's Peer lieview of Canada's 2007Individual Action Plan.